Schedule F Flashcards
1
Q
criticisms of Schedule F (4)
A
- formulaic, with no statistical, historical, or actuarial basis for formulas
- unauthorized reinsurers may provide higher-quality protection
- detailed calculations may lead to a false level of precision
- slow payers who are financially strong eventually pay, while current reinsurers may not withstand a stress event
2
Q
how aging of ceded reinsurance is determined
A
- date on which claim must be paid by reinsurer, if specified; or
- date on which insurer must report claim to reinsurer, if specified; or
- date the amount exceeds $50K and is entered into the insurer’s accounts as a paid recoverable; else
- if under $50K and no dates specified, report as current
- recoverables from mandatory pools and associations reported as current
3
Q
sections of Schedule F
A
1) assumed reinsurance
2) premium portfolio reinsurance effected or canceled
3) ceded reinsurance
4) issuing or confirming banks for letters of credit
5) interrogatories
6) restatement of balance sheet
4
Q
importance of Schedule F to actuaries (3)
A
- to understand sources of assumed reinsurance
- to understand collectability of ceded reinsurance
- to comment in SAO on net reserves for participation in underwriting pools and associations
5
Q
adjustments to liabilities to restate gross of reinsurance (5)
A
- loss and LAE reserves
- UEPR
- ceded reinsurance premiums payable
- funds held under reinsurance treaties
- provision for reinsurance
6
Q
adjustments to assets to restate gross of reinsurance (2)
A
- reinsurance recoverables on paid loss and LAE
* net amount recoverable from insurers (balancing item)